Banking News

Agony continues for AMP

Agony continues for AMP

(Australia) – Shares in troubled financial services group AMP plumbed new record lows this week as investors delivered their verdict on the company’s latest restructuring plan. AMP shares plunged 36 percent on Monday when the stock resumed trading after chief executive Andrew Mohl announced the plan last week, which sees the separation of the company’s Australian and UK assets.

The plan involves a write-off of a further A$2.6 billion on the value of the British businesses and the raising of A$1.5 billion in fresh capital. The British equities portfolio, which has been the root cause of the UK capital adequacy problems, will be sold.

The share market dive, corrected by a slight rebound on Tuesday, came after AMP successfully raised A$1 billion of the fresh equity from institutions in a placement handled by UBS Warburg.

The placement was at a price of A$5.50, a steep discount to the previous closing price of A$8.73, and closed Monday at A$5.60.

While analysts said the slide was unsurprising, the consensus is that the company, and long suffering shareholders, will reap benefits from the demerger going forward.
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